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Banks told to disburse loans to eligible ryots

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Inordinate delays in disbursal of crop loans to farmers by banks appears to be heading for a resolution.

The State government has asked the banks to disburse loans to eligible farmers after verifying the details in the old Pattadar passbooks. The instruction comes in the light of the objections raised by the banks that the new Pattadar passbooks do not contain the previous outstanding of the respective farmers and hence, it is becoming difficult to asses their eligibility.

“Banks have been instructed to verify the details of farmers’ dues in the old passbooks so that they can fix the quantum of loan that can be disbursed to them,” a senior official said. The instructions, according to the official, follow a representation made by the State Level Bankers Committee on the difficulties they are facing in the absence of guidelines relating to the validity of the old Pattadar passbooks which contained the details of dues to banks in their respective areas.

The banks have, therefore, decided to disburse loans after re-verification of the details of individual farmers which resulted in delays in releasing the amounts. There were also instances where banks asked farmers to obtain no-objection certificates from the other banks in their respective areas for processing loans. As a result, the banks could register disbursal of less than 20% of the targeted crop loan for the current season so far. Of the total ₹58,063 crore for agriculture portfolio during the current year, crop loans are estimated at ₹42,494 crore and the term loans constitute ₹15,569 crore.

With the delays in the disbursal of loans turning out to be a cause of concern for the farmers, the government stepped into the picture asking the banks to fix the eligibility after verifying the details in the old Pattadar passbooks. “Instructions have been issued to banks to speed up disbursal of loans. Allowing verification of dues from the old passbooks will ensure that loans applications are processed speedily avoiding scope for farmers to obtain no objection certificates from several banks in their respective areas,” the official said.

Principal Secretary (Agriculture) C. Parthasarathy told The Hindu that the loan disbursal was progressing at a relatively slow pace. as of now, but is expected to gather momentum after the instructions have been communicated to the banks.